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ViacomCBS Exec Shuffle Signals Move Toward $500 Million in Synergy Goals

Elaine Low

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The latest cluster of high-level ViacomCBS executive announcements — which included CBS chief creative officer David Nevins and MTV/VH1 chief Chris McCarthy expanding their oversight, and Comedy Central head Kent Alterman exiting — likely constitutes the last round of public leadership shuffling ahead of the close of the Viacom-CBS transaction in early December, according to a source familiar with the matter. But it is just the place-setting for the $500 million in synergy savings that ViacomCBS chief Bob Bakish has promised to deliver over the next 12-24 months.

Now that the primary leadership for the major divisions has been cemented and is ready to sally forth on Day 1 of a new ViacomCBS, further strategic streamlining and new corporate appointments will follow, though none are likely to be as high-profile as Monday’s shuffle, which included McCarthy taking over Comedy Central, Paramount Network and other channels.

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There are no clear plans yet for layoffs at either company, said the source, though there are areas — the usual suspects in any mega-merger — in which ViacomCBS is likely to do so. Bakish and other top brass have not yet communicated just how much of the cost-cutting will be at the expense of personnel. Expect corporate appointments in areas such as corporate development, strategy and human resources.

The move to consolidate leadership was said to be done in the spirit of breaking down silos and streamlining creative collaborative efforts, peeling away at the various fiefdoms that had been built into Viacom’s corporate structure over the years. The streamlining unveiled Sunday — which also includes the departure of Sarah Levy as COO of Viacom Media Networks — will reduce management layers that were built up over the years to protect various executives’ turf rather than for efficiency’s sake. Now, as CBS and Viacom come together in a very different pay TV marketplace, the winnowing also has the benefit of trimming ViacomCBS’ roster of highly compensated managers as well.

The newly formed “content council,” headed by Nevins, will meet regularly going forward in order to ensure that the various brand groups are working together, though according to the source, each executive leader’s greenlight power will remain.

Bakish has previously said that he has a “clear line of sight” into how that will be achieved, telegraphing revenue synergies that he places into four categories: distribution (those synergies will begin to materialize in 2020), ad sales, product licensing and streaming.

Thanks to shared ownership stakes in the form of the Redstone family’s National Amusements, Inc. — the controlling stakeholder in both Viacom and CBS — the fusion of the two companies, from announced merger to expected close, will span just four months. That’s notably less than the 15-month timeline for Disney’s acquisition of 21st Century Fox (which spurred a bidding war with Comcast), not to mention the legally challenged AT&T-Time Warner deal, which faced scrutiny from the Justice Department, extending its limbo period.

At Goldman Sachs’ Communacopia conference in mid-September, CBS CFO Christina Spade nodded to vendor sourcing and, to a lesser extent, real estate, as areas that management is examining as a way to reduce overlap and costs.

Consolidating or reducing vendors and renegotiating rates to befit a scaled-up company, moving employees to underutilized office space, and reconsidering leases up for expiration are just a few of the ways that a combined ViacomCBS could trim expenses, according to the source, though no plans are yet concrete.

But that’s also just a starting point, said Spade, to half a billion dollars in synergies. She has indicated that there is potential upside to that $500 million goalpost.

And, as Bakish pointed out at the Vanity Fair New Establishment Summit, the deal hasn’t even closed yet.

“People have got to take a beat,” he said at the summit. “I’m highly confident the market will see the value of this company.”

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